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Why Contingency Plans are Key for Small Business

Large businesses have a lot to lose, so they often have complex contingency plans in place to recover from several kinds of disaster. Experts in the industry say it is just as important for small businesses to develop contingency plans, yet many choose to take their chances without one.
At this time of year, disaster can come in many forms, including natural catastrophes like floods and fires as well as pandemic breakouts like H1N1. And David Paulison, former executive director of the Federal Emergency Management Agency (FEMA), says 40 to 60 percent of small businesses that get hit by a disaster are unable to recover.
Contingency plans do not have to be immensely complex to be successful. Simply having a viable plan in place that illustrates how employees and management should act in the wake of a disaster could put you a few steps ahead.
These sites will help your small business contingency plan get off the ground. Remember, ignoring risk is a gamble – without a plan, could you smoothly recover from disaster?

www.ready.gov
www.flu.gov

Survey
In the spring of 2009, Agility Recovery Solutions engaged Hughes Marketing Group to survey small and mid-sized businesses in North America about their disaster recovery and business continuity plans. The survey assessed their abilities and readiness to resume “business as usual” after interruptions caused by natural and man-made disasters, such as hurricanes, thunderstorms, telephone outages, server failures and more.
General Findings
The investment of time to implement an effective risk management program provides a solid rate of return for an organization, impacting both the insurance and loss cost.  The only alternative to risk management is crisis management - and crisis management is much more expensive, time consuming, and embarrassing.  Watch out for those rabbits!

Small and medium-sized businesses are woefully unprepared for disasters.

• 90% of smaller companies (<100 employees) surveyed spend less than one day per month preparing and maintaining their continuity plans.
• One in five (22%) spend no time maintaining their plans.
• Comparatively, 20% of larger companies (>100 employees) spend over 10 days per month on their continuity plans.

Data backup brings a false sense of security.

• 94% of companies have a formal data backup plan.
• 75% of companies say they have arrangements in place for employees to come back to work within days of a business interruption. Yet many companies that acknowledge having a plan have not addressed basic infrastructure and people recovery needs.

Responses indicate a difference between saying the “right thing” and taking action.

• Gaining C-level buy-in is a challenge. Regardless of business size, survey results show many companies have difficulties getting C-level executives to embrace the importance of continuity planning.
• Although 67% of respondents feel an effective business continuity plan is paramount to company success, only 53% think their company’s management team feels the same way.